The Israeli Economists Forum joined the Bank of Israel’s calls, urging the government to immediately launch a more disciplined and organized state budget.
Amid mounting criticism, the forum echoed Bank of Israel Governor Benjamin Netanyahu’s call for Finance Minister Bezalel Smotrich to lead the effort.
The forum stressed In a statement broadcast by Channel 12 Israel On the urgent need for a state budget that determines economic policies, sets priorities, and pushes forward the structural reforms necessary for the recovery of the Israeli economy.
Without a budget, uncertainty increases, according to the channel, raising concerns about a significant increase in the deficit, increased risks, and higher interest payments. Government ministries are also unable to plan and operate systematically, while delays in approving the budget send a negative message to financial markets and rating agencies.
Economic challenges
The forum said, “Israel is currently facing enormous challenges. The Israeli economy, which has been severely affected over the past year and continues to be affected by the war, requires decisions to put it on the path to recovery and rehabilitation.”
The recent economic turmoil requires urgent and decisive action by the government to stabilize and revitalize the economy.
“We urge the government to stop procrastinating and start doing what is expected of a government that works for its citizens. The government’s avoidance of addressing economic challenges has a significant economic cost,” he added.
The forum’s warning highlights the urgent need for effective economic management to pull Israel out of its current economic difficulties.
The channel commented on the forum’s warning, saying: The message is clear: making a timely and organized decision is crucial to preventing further economic deterioration and promoting a stable future.
Israel’s fiscal deficit widened in June to 7.6% of GDP over the past 12 months, or NIS 146 billion ($39.8 billion), up from 7.2% in May, Finance Ministry Accountant General Yali Rotenberg said this month.
The deficit is 1% higher than the government’s target of 6.6% for the end of the current year.
During the past month alone, the fiscal deficit reached 14.6 billion shekels ($4 billion), compared to 6.4 billion shekels ($1.74 billion) in June 2023.
Since the beginning of this year, the fiscal deficit has reached NIS 62.3 billion ($17 billion), compared to a surplus of NIS 6.6 billion ($1.8 billion) in the first six months of 2023.
